A Nevada man pleaded guilty yesterday to one count of wire fraud stemming from his role in a years-long fraud scheme, during which he stole more than $6.1 million in victim investor funds.According to court documents, Mykalai Kontilai, formerly Michael Contile, 55, of Las Vegas, facilitated an investment fraud scheme involving his company, Collector’s Coffee Inc., doing business as Collector’s Café (Collector’s Coffee), a company incorporated in California and headquartered in Las Vegas. From 2012 to 2018, Kontilai made or caused to be made numerous materially false and misleading representations to induce victims to invest in Collector’s Coffee — a company he claimed was on the verge of launching an online auction house for third-party owned collectibles, such as Hollywood and sport memorabilia. As a result of Kontilai’s numerous false and misleading statements, including that investor funds would be used for legitimate business purposes, that Kontilai had personally invested millions of his own money in the company, and that he did not take a salary, Kontilai successfully raised approximately $23 million from Collector’s Coffee investors. However, rather than using the proceeds as represented, Kontilai stole approximately $6.1 million for his own personal use, including for the purchase of luxury goods, apartments, and vehicles.The U.S. Securities and Exchange Commission (SEC) began investigating Kontilai for misappropriating investor funds in or around 2017. Kontilai obstructed the investigation by forging documents that he caused to be transmitted to the SEC and lied under oath to the SEC. Kontilai was charged in connection with this conduct both in the present case on June 3, 2020, and in a separate case in the District of Colorado on March 10, 2020. While under investigation but prior to charging, Kontilai fled to Russia and was ultimately arrested on an Interpol Red Notice in Germany in 2023. He was extradited back to the United States to face the pending charges in May. As part of the plea agreement in this case, the government will move to dismiss the Colorado case at sentencing.Kontilai pleaded guilty to one count of wire fraud. He is scheduled to be sentenced on Dec. 4 and faces a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division; U.S. Attorney Jason M. Frierson for the District of Nevada; Special Agent in Charge Spencer L. Evans of the FBI Las Vegas Field Office; and Special Agent in Charge Carissa Messick of IRS Criminal Investigation (IRS-CI) made the announcement.The FBI and IRS-CI are investigating the case. The Justice Department’s Office of International Affairs provided significant assistance in securing the extradition from Germany of Kontilai.Trial Attorneys Brandon Burkart and Sara Hallmark of the Criminal Division’s Fraud Section (FRD) and Assistant U.S. Attorney Jessica Oliva for the District of Nevada prosecuted this case. Former FRD Trial Attorney Emily Scruggs provided valuable assistance. 

HOUSTON – Local critical infrastructure partners and area business owners have participated in a training session to increase cybersecurity posture and awareness on how to tackle such cyberattacks, announced U.S. Attorney Jennifer B. Lowery.   

The U.S. Attorney’s Office (USAO), in partnership with Homeland Security Investigations (HSI), hosted the roundtable training today in order to educate private industry partners on what to do in the event of a cyberattack upon their businesses. 

“We are excited to partner with HSI and other federal agencies to help protect Houston’s often vulnerable critical infrastructure assets,” said Lowery. “From our international airports, unique power grid and robust oil and gas sector, Houston is home to some of the country’s most valuable assets.”

“As criminal organizations and other bad actors become more sophisticated in their ability to launch cyber-attacks against critical infrastructure and private business, it is crucial for HSI to work closely with our federal partners and the private sector to develop resilient and adaptive defenses against malicious cyberspace activity and network intrusions,” said HSI Houston Special Agent in Charge Mark Dawson. “Hosting today’s roundtable with the USAO was an important step, and we will continue to seek opportunities to enhance collaboration with our law enforcement partners and other stakeholders to prevent potential network intrusions and ensure greater unity of effort in response to cyber incidents.”

On a weekly basis, numerous cyberattacks occur on businesses all across the Southern District of Texas. There must be a quick response team in place to immediately address the intrusion in order to circumvent major damage and losses. The USAO routinely works with other prosecutors and law enforcement in the district to stay ahead of potential cyber threats. 

As the global economy enters day 35 of Russia’s invasion of Ukraine, businesses must be reminded to be diligent about their networks and to know their response plans, have a paper copy available and review their cyber-related insurance policies.

The USAO has established contact lines for assistance 24 hours a day. If you have fallen victim to an intrusion, inadvertently diverted funds to an unknown third-party or suffered a ransomware attack, please email (usatxs-cybersecurity@usdoj.gov) directly or call the hotline at 713-542-5213.  

McALLEN, Texas – Three Mexican nationals have been indicted on charges of attempted exportation of wildlife, announced U.S. Attorney Jennifer B. Lowery.

A federal grand jury returned the two-count indictment against Jonathan Roberto Rojas-Casados, 32, Roberto Rojas-Ramirez, 50, and Roberto Angel Roman-Alvarez, 27, today. They are expected to make their initial appearance before a U.S. magistrate judge in the near future.

The charges allege the men attempted to take over 160 animals out of the country.

On Aug. 3, according to the complaint originally filed in the case, the three men drove two vehicles into the Hidalgo Port of Entry and attempted to travel outbound into Mexico. Rojas-Casados and Roman-Alvarez allegedly rode together in a Ford Econoline while Rojas-Ramirez followed behind in a separate vehicle.

The charges allege authorities sent both vehicles for inspection. Upon a search of the Econoline, they allegedly discovered two boxes that contained over 160 animals that were concealed in small plastic containers and fabric bags located within the boxes. Among the animals were snakes, Chinese water dragons, iguanas, scorpions, tarantulas, frogs, geckos and lizards, according to the charges.

Rojas-Ramirez allegedly picked up the wildlife and loaded the boxes into the vehicle. Then, he contacted Rojas-Casados for assistance in transporting the wildlife in exchange for payment, according to the complaint.

The charges further allege that several of the animals are classified as Appendix II wildlife in the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES):

 



Quantity





Common Name





Scientific Name





10





Ball Python





Pythons regius





3





Colombian Rainbow Boa





Epicrates maurus





2





Black and White Tegu





Salvator merianae





6





Green Iguana





Iguana iguana





5





Forest Armadillo Lizard





Cordylus jonesii





8





Jackson’s Chameleon





Trioceros jacksonii





2





Russian Tortoise





Testudo horsfieldii





10





Red-eyed Treefrog





Agalychnis callidryas





6





Green and Black Poison Dart Frog





Dendrobates auratus





6





Dyeing Poison Dart Frog





Dendrobates tinctorius





10





Curly-hair Tarantula





Tliltocatl albopilosus





10





Emperor Scorpion





Pandinius imperator



 

It is a violation of the Endangered Species Act (ESA) to export wildlife without a license or permission from the Department of the Interior or Department of Commerce. It is an additional violation of the Lacey Act to export CITES Appendix II wildlife against the ESA. None of the men had a license or permission to export wildlife from the United States, according to the charges.

 

If convicted, they face up to 10 years in prison and a possible $250,000 maximum fine.  

 

Homeland Security Investigations and Fish and Wildlife Service conducted the investigation with the assistance of Customs and Border Protection and Gladys Porter Zoo. Assistant U.S. Attorney Devin V. Walker is prosecuting the case.

 

An indictment is a formal accusation of criminal conduct, not evidence.

A defendant is presumed innocent unless convicted through due process of law.

HOUSTON – Executives and leaders of the Texas Medical Center (TMC) have learned about the dangers of cyberattacks by malicious actors like China, Russia and transnational criminals and how to tackle those attacks, announced U.S. Attorney Alamdar S. Hamdani.

The U.S. Attorney’s Office (USAO) along with FBI, Homeland Security Investigations, Cybersecurity and Infrastructure Security Agency and the Food and Drug Administration provided the training which included essential tools and protocols for TMC attendees to follow if their facilities are subject to cyber intrusions.   

Methodist Hospital hosted the training event with attendees from Memorial Herman Hospital, Texas Children’s Hospital, MD Anderson, Baylor College of Medicine and the University of Texas Health System. 

Criminal organizations and nation state actors like China, Russia and Iran as well as other bad actors have become more sophisticated in their ability to launch cyber-attacks against critical infrastructure such as the health care facilities in the TMC. 

“It is essential to national security and crucial to the safety of patients for federal law enforcement to work closely with the health care sector to develop resilient and adaptive defenses against malicious cyberspace activity and network intrusions,” said Hamdani. “The USAO will continue to seek opportunities to enhance collaboration with our law enforcement partners and the health care industry to prevent potential network intrusions and ensure greater unity of effort in response to cyber incidents.”

On a weekly basis, hundreds of cyberattacks occur on businesses all across the Southern District of Texas. There must be a quick response team in place to immediately address the intrusion in order to circumvent major damage and losses. The USAO routinely works with other prosecutors and law enforcement in the district to stay ahead of potential cyber threats. 

As the global economy enters another year of Russia’s invasion of Ukraine, and China continues to seek to disrupt critical industries like the health care sector, the private industry must be reminded to be diligent about their networks and to know their response plans, have a paper copy available and review their cyber-related insurance policies.

The USAO has established contact lines for assistance 24 hours a day. If you have fallen victim to an intrusion, inadvertently diverted funds to an unknown third-party or suffered a ransomware attack, please email directly or call the hotline at 713-542-5213.  

The Justice Department announced today the unsealing of a warrant authorizing the seizure of 41 internet domains used by Russian intelligence agents and their proxies to commit computer fraud and abuse in the United States. As an example of the Department’s commitment to public-private operational collaboration to disrupt such adversaries’ malicious cyber activities, as set forth in the National Cybersecurity Strategy, the Department acted concurrently with a Microsoft civil action to restrain 66 internet domains used by the same actors.“Today’s seizure of 41 internet domains reflects the Justice Department’s cyber strategy in action – using all tools to disrupt and deter malicious, state-sponsored cyber actors,” said Deputy Attorney General Lisa Monaco. “The Russian government ran this scheme to steal Americans’ sensitive information, using seemingly legitimate email accounts to trick victims into revealing account credentials. With the continued support of our private sector partners, we will be relentless in exposing Russian actors and cybercriminals and depriving them of the tools of their illicit trade.”“This disruption exemplifies our ongoing efforts to expel Russian intelligence agents from the online infrastructure they have used to target individuals, businesses, and governments around the world,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “Working closely with private-sector partners such as Microsoft, the National Security Division uses the full reach of our authorities to confront the cyber-enabled threats of tomorrow from Russia and other adversaries.”"Working in close collaboration with public and private sector partners—in this case through the execution of domain seizures — we remain in prime position to counter and defeat a broad range of cyber threats posed by adversaries,” said FBI Deputy Director Paul Abbate. “Our efforts to prevent the theft of information by state-sponsored criminal actors are relentless, and we will continue our work in this arena with partners who share our common goals.”“This seizure is part of a coordinated response with our private sector partners to dismantle the infrastructure that cyber espionage actors use to attack U.S. and international targets,” said U.S. Attorney Ismail J. Ramsey for the Northern District of California. “We thank all of our private-sector partners for their diligence in analyzing, publicizing, and combating the threat posed by these illicit state-coordinated actions in the Northern District of California, across the United States, and around the world.”According to the partially unsealed affidavit filed in support of the government’s seizure warrant, the seized domains were used by hackers belonging to, or criminal proxies working for, the “Callisto Group,” an operational unit within Center 18 of the Russian Federal Security Service (the FSB), to commit violations of unauthorized access to a computer to obtain information from a department or agency of the United States, unauthorized access to a computer to obtain information from a protected computer, and causing damage to a protected computer. Callisto Group hackers used the seized domains in an ongoing and sophisticated spear-phishing campaign with the goal of gaining unauthorized access to, and steal valuable information from, the computers and email accounts of U.S. government and other victims.In conjunction, Microsoft announced the filing of a civil action to seize 66 internet domains also used by Callisto Group actors. Microsoft Threat Intelligence tracks this group as “Star Blizzard” (formerly SEABORGIUM, also known as COLDRIVER). Between January 2023 and August 2024, Microsoft observed Star Blizzard target over 30 civil society entities and organizations – journalists, think tanks, and nongovernmental organizations (NGOs) – by deploying spear-phishing campaigns to exfiltrate sensitive information and interfere in their activities.The government’s affidavit alleges the Callisto Group actors targeted, among others, U.S.-based companies, former employees of the U.S. Intelligence Community, former and current Department of Defense and Department of State employees, U.S. military defense contractors, and staff at the Department of Energy. In December 2023, the Department announced charges against two Callisto-affiliated actors, Ruslan Aleksandrovich Peretyatko (Перетятько Руслан Александрович), an officer in FSB Center 18, and Andrey Stanislavovich Korinets (Коринец Андрей Станиславович). The indictment charged the defendants with a campaign to hack into computer networks in the United States, the United Kingdom, other North Atlantic Treaty Organization member countries, and Ukraine, all on behalf of the Russian government.The FBI San Francisco Field Office is investigating the case.The U.S. Attorney’s Office for the Northern District of California and the Justice Department’s National Security Cyber Section of the National Security Division are prosecuting the case.The case is docketed at Application by the United States for a Seizure Warrant for 41 Domain Names For Investigation of 18 U.S.C. § 1956(a)(2)(A) and Other Offenses, No. 4-24-71375 (N.D. Cal. Sept. 16, 2024).An affidavit in support of a seizure warrant and an indictment are merely allegations. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

HOUSTON – The Greater Houston Partnership and U.S. Commercial Service are hosting a forum Thursday, Oct. 19 from 8 a.m. to 12:30 p.m. to support engagement for the Disruptive Technology Strike Force with business leaders in Houston.

U.S. Attorney Hamdani will participate in a session entitled Global Trade Threats and National & Economic Security featuring leadership from the Department of Justice’s National Security Division (NSD) and Department of Commerce.

Other speakers on varying topics include personnel from FBI and Homeland Security Investigations.

Speakers will discuss best practices to protect U.S. companies from hidden threats that can compromise sensitive information and leave them vulnerable to a host of security attacks. Topics include global trade threats, cyber threats, theft of trade secrets, economic espionage and more.

Under the leadership of the NSD and BIS, the strike force was launched to protect U.S. Advanced Technologies critical technological assets that are at risk of being illegally acquired by foreign adversaries. The strike force operates in 14 metropolitan regions across the United States including Houston and Dallas with oversight from the local U.S. Attorneys’ Offices.

According to the DOJ, nation-state adversaries can use advanced technology such as the People’s Republic of China, Iran, Russia and North Korea to enhance its military capabilities, improve calculations in weapons design and testing and develop algorithms to break encryptions that protect sensitive data and classified information.

Registration is $40 to attend and the registration form is available online. Open to the public and media, the discussions will be held at Partnership Tower, 701 Avenida De Las Americas Houston, TX 77010.

Click here for more information on the Disruptive Technology Strike Force.

Remote video URL



















From the outset of Russia’s unprovoked, full-scale invasion of Ukraine on Feb. 24, 2022, the Department of Justice has prioritized enforcing the sweeping sanctions, export restrictions, and economic countermeasures that the United States has imposed alongside our global partners. Today, the Department continues that work through significant enforcement actions in five separate federal cases against sanctioned oligarchs and facilitator networks supporting the Russian regime.

Today’s actions coincide with the approaching two-year mark of Russia’s unprovoked war in Ukraine. Read more about the Justice Department’s efforts to hold Russia accountable here.

“The Justice Department is more committed than ever to cutting off the flow of illegal funds that are fueling Putin’s war and to holding accountable those who continue to enable it,” said Attorney General Merrick B. Garland. “That is why today we are announcing several additional enforcement actions that the Justice Department has taken to bring prosecutions against and seize assets of sanctioned enablers of the Kremlin and Russian military.”

“Since the onset of Russia’s brutal and unprovoked invasion of Ukraine, the Justice Department has used every tool in our arsenal – including our international partnerships – to target the criminal actors and activity propping up Vladimir Putin, his henchmen, and his illegal war,” said Deputy Attorney General Lisa Monaco. “Over the last two years, our Task Force KleptoCapture has restrained, seized, and obtained judgments to forfeit nearly $700 million in assets from Russian enablers and charged more than 70 individuals for violating international sanctions and export controls levied against Russia. The charges we announce today against oligarchs, facilitators, and money launderers are the next chapter: so long as Russia's aggression continues, so too will our resolve to hold its enablers accountable. We stand firmly with the people of Ukraine.”

“It has been two years since Russia’s unprovoked invasion of Ukraine and the FBI continues to go after the Russian criminals who finance and enable Russia’s war,” said FBI Director Christopher Wray. “To the people of Ukraine fighting for their freedom: The FBI remains steadfast in our efforts to disrupt and hold accountable the criminals supporting the Russian War, and we will continue to stand with you to fend off Russian aggression for as long as it takes.”

In the Southern District of New York, the Department unsealed charges against three people, including sanctioned oligarch Andrey Kostin and two of his U.S.-based facilitators. The facilitators, Vadim Wolfson, aka Vadim Belyaev and Gannon Bond, were arrested today.

In the Middle District of Florida, a grand jury returned an indictment charging Sergey Vitalievich Kurchenko, a sanctioned pro-Russian Ukrainian oligarch, in a years-long scheme to violate and evade U.S. sanctions by receiving funds from and doing approximately $330 million in business with U.S. persons.

In the Northern District of Georgia, Atlanta-based dual national Feliks Medvedev pleaded guilty to his role in laundering over $150 million through bank accounts and shell companies on behalf of Russian clients. Separately, on Feb. 13, KSK Group – a sanctioned Russian company which assists Russian citizens with international money movements – and two overseas Russian nationals, including one sanctioned individual, were indicted for money laundering.

In the Southern District of Florida, the United States filed a civil forfeiture complaint against two Miami luxury condominium properties owned by sanctioned Russian oligarch Viktor Perevalov. The properties are allegedly connected to a conspiracy to maintain and transfer real estate for the benefit of Perevalov. Located at the Ritz Carlton in Bal Harbour, the properties are valued at approximately $2.5 million.

Lastly, in the District of Columbia, a superseding indictment was unsealed today charging Vladislav Osipov with bank fraud in connection with a criminal scheme to facilitate the operation of the Motor Yacht (M/Y) Tango, a 255-foot luxury yacht that the Justice Department has previously stated is owned by sanctioned Russian oligarch Viktor Vekselberg. 

United States v. Kostin et al., Southern District of New York

Today, the United States unsealed an indictment charging Andrey Kostin, a sanctioned Russian oligarch and the President and Chairman of a Russian state-owned bank with participating in two schemes to violate U.S. sanctions and arrested two U.S.-based co-conspirators for their role in facilitating one of the schemes.

As alleged in the indictment, Kostin participated in a scheme to evade sanctions and launder funds to support two superyachts, collectively worth over $135 million. Kostin and two U.S. persons also allegedly engaged in a scheme to evade sanctions related to a luxury home in Aspen, Colorado. Facilitators Vadim Wolfson, aka Vadim Belyaev, 56, of Austin, Texas, and a legal permanent resident of the United States, and Gannon Bond, 49, a U.S. citizen of Edgewater, New Jersey, were arrested earlier today.

Kostin is a Russian oligarch who was sanctioned by OFAC on April 6, 2018, pursuant to Executive Order 13661 for being an official of the Government of the Russian Federation. From at least on or about April 6, 2018, through at least on or about March 2, 2022, Kostin and others, including at times Wolfson and Bond, allegedly participated in schemes to violate the International Emergency Economic Powers Act (IEEPA), through the provision of funds, goods, and services, including U.S. financial services and U.S. dollar transactions, to and for Kostin’s benefit. The indictment alleges that Kostin also engaged in a scheme to commit money laundering to promote IEEPA violations.

According to the indictment, before and after OFAC sanctioned Kostin, he beneficially owned and controlled, through various shell companies, several assets worth tens of millions of dollars, including two superyachts identified as the Sea Rhapsody and Sea & Us, valued at over $135 million. Kostin and others allegedly violated IEEPA on numerous occasions, including by causing U.S. dollar payments to be made for the maintenance, operation, and improvement of the Sea Rhapsody and Sea & Us for the benefit of Kostin and without an OFAC license, which is required for U.S. persons to transact with a sanctioned person. In causing these U.S. dollar payments to be made, Kostin and others also allegedly committed international money laundering.

The indictment alleges that Kostin also owned a luxury home in Aspen, Colorado, that he purchased for $13.5 million in 2010. From at least on or about April 6, 2018, through at least in or about September 2019, Kostin, Wolfson, Bond, and others participated in a scheme to violate the IEEPA by providing funds, goods, and services for the benefit of Kostin, whose property and interests in property, including the Aspen home, were blocked as a result of the OFAC sanctions against him. Specifically, notwithstanding having been sanctioned by OFAC, Kostin and his conspirators allegedly schemed to operate, maintain, and improve Kostin’s Aspen residence in a manner designed to conceal Kostin’s continued ownership of this luxury asset. In addition, in or about September 2019, Kostin, Wolfson, Bond, and others allegedly committed additional sanctions violations by dealing in and transferring Kostin’s blocked property. Specifically, the conspirators allegedly arranged to sell the Aspen home and provide Kostin with approximately $12 million resulting from the sale.

Kostin, 67, of Russia, remains at large and is believed to be in Russia. KOSTIN is charged with two counts of conspiracy to violate IEEPA, two counts of violating IEEPA, and one count of conspiracy to commit international money laundering, all of which each carry a maximum sentence of 20 years in prison.

Wolfson is charged with one count of conspiracy to violate IEEPA and two counts of violating IEEPA, each of which carries a maximum sentence of 20 years in prison.

Bond is charged with one count of conspiracy to violate IEEPA and two counts of violating IEEPA, each of which carries a maximum sentence of 20 years in prison. The FBI’s Washington Field Office is investigating the case.

Assistant U.S. Attorneys Emily Deininger and David Felton for the Southern District of New York’s Illicit Finance and Money Laundering Unit, and Trial Attorneys Derek Shugert of the National Security Division’s Counterintelligence and Export Control Section and Oleksandra Johnson of the Criminal Division’s Money Laundering and Asset Recovery Section are prosecuting the case.

United States v. Kurchenko, Middle District of Florida

Pro-Russian Ukrainian oligarch Sergey Vitalievich Kurchenko, 38, currently believed to be living in Moscow, Russia, is charged with violating the IEEPA and U.S. sanctions on Russia in connection with a years-long scheme to do business in the United States, in violation of U.S. sanctions. Kurchenko was sanctioned by OFAC in 2015 for his role in misappropriating state assets of Ukraine or of an economically significant entity in Ukraine.

As alleged, between in or about July 2017 through in or about February 2022, Kurchenko and others used a network of shell companies that Kurchenko owned and controlled to sell metal products – including pig iron, wire rods, and steel billets – to individuals and entities in the United States, including a U.S. company identified as Company A in court documents. The metal products included items produced in factories in the Donbas region of Ukraine that were owned and controlled by Kurchenko. As alleged, Kurchenko committed money laundering by transferring funds into and out of the United States in connection with the scheme and his IEEPA violations.

To facilitate the unlawful transactions described above, Kurchenko allegedly met with U.S.-based purchasers in Moscow to negotiate metal transactions between entities that he owned and controlled and U.S. persons, including Company A and its representatives. As alleged, Kurchenko willfully engaged in transactions involving the sale and shipment of products valued at more than $330 million to individuals and companies in the United States.

Kurchenko is charged with conspiracy to violate the IEEPA and U.S. sanctions against Russia, which carries a maximum penalty of 20 years in prison, and conspiracy to commit money laundering, which carries a maximum penalty of 20 years in prison.

The FBI Tampa Field Office, Orlando Resident Agency, and Washington Field Office, International Corruption Unit, are investigating the case, with valuable assistance provided by U.S. Customs and Border Protection.

Assistant U.S. Attorney Chauncey Bratt for the Middle District of Florida and Trial Attorneys Sean O’Dowd of the Criminal Division’s Money Laundering and Asset Forfeiture Section and Emma Ellenrieder of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case.

United States v. Feliks Medvedev and United States v. KSK Group et al., Northern District of Georgia

On Feb. 7, Feliks Medvedev, 42, a Russian citizen residing in Buford, Georgia, pleaded guilty to conducting an unlicensed money transmitting business in connection with using shell companies to make more than 1,300 financial transfers totaling over $150 million into bank accounts controlled by the defendant.

According to court documents, Medvedev registered eight shell companies in the state of Georgia between July 2019 and July 2020, for which he was the sole agent and signatory on relevant bank accounts. Medvedev’s purported business purposes for these companies included, among others, “computer software wholesaler,” “professional equipment,” and “coal / mineral wholesaler.” Court documents note that these companies did not have any employees, or expenditures for payroll, rent, equipment, or other business-related costs.

As stated in documents filed with the court, throughout the scheme, there were over 1,200 transfers totaling over $150 million into the bank accounts for these companies, which were controlled by Medvedev. Over $150 million was then transferred out of these accounts in over 1,300 transactions. Medvedev retained over $500,000 from the funds transferred into accounts he controlled.

Medvedev pleaded guilty to one count of conducting an unlicensed money transmitting business, which carries a maximum penalty of five years in prison and up to a $250,000 fine. Medvedev is scheduled to be sentenced on May 7.

Relatedly, a federal grand jury in the Northern District of Georgia returned an indictment on Feb. 13, alleging that Alexey Chubarov, 42, of Russia, and Lev Solyannikov, 31, of Russia, and their company KSK Group, conspired with Medvedev in the transfer of these funds and then laundered the illegal proceeds.

According to the indictment, KSK Group is a business consulting firm in Moscow, Russia, and Chubarov and Solyannikov both worked for KSK Group. Chubarov and Solyannikov allegedly informed Medvedev about incoming wires and then directed Medvedev concerning the outgoing transfers he should make, including transferring certain funds to the Singapore Precious Metal Exchange (Exchange) to purchase gold bullion. According to the indictment, Medvedev’s companies transmitted at least $65 million to purchase gold from the Exchange.

On Sept.14, 2023, OFAC added Chubarov and KSK Group to the list of Specially Designated Nationalss and Blocked Persons, pursuant to Executive Order 14024, for operating or having operated in the financial services sector of the Russian Federation economy.

Chubarev and Solyannikov are charged with conspiracy to conduct an unlicensed money transmitting business and conducting an unlicensed money transmitting business, which carries a maximum penalty of five years in prison and up to a $250,000 fine for each count; conspiracy to commit money laundering, which carries a maximum penalty of 20 years in prison; and money laundering which carries a maximum penalty of 20 years in prison; and engaging in monetary transactions in property derived from specified unlawful activity, which carries a maximum statutory penalty of 10 years in prison.

The FBI’s Atlanta Field Office is investigating the case.

Assistant U.S. Attorneys Christopher J. Huber, Norman L. Barnett, and Sekret T. Sneed for the Northern District of Georgia are prosecuting the case.

Forfeiture of Real Properties Belonging to Viktor Perevalov, Southern District of Florida

Today, the United States filed a civil forfeiture complaint in the Southern District of Florida alleging that two Bal Harbour condominiums are subject to forfeiture based on violations of IEEPA, OFAC sanctions, and federal money laundering statutes.

As alleged in the complaint, Viktor Perevalov and Valeri Abramov were co-founders of VAD, AO, a Russia-based construction company responsible for constructing the Tavrida Highway in the Russian-occupied Crimea region of Ukraine. On Jan. 26, 2018, pursuant to Executive Order 13685, OFAC sanctioned Victor Perevalov, Valeri Abramov, VAD, AO, and others following the Russian invasion of Crimea, effectively blocking all of their property or interests in property in the United States from being transferred, paid, exported, withdrawn, or otherwise dealt in.

According to the complaint, soon after the sanctions, R.S., a Miami real estate agent retained to manage the properties, worked to transfer the two condominiums owned by Perevalov, Units 1616 and 1617 located at 10295 Collins Avenue, Bal Harbour, Florida, 33154 (the Defendant Properties) to an LLC in violation of the sanctions. The Defendant Properties have a combined value of approximately $2.5 million. On April 10, 2018, R.S. and others, including a law firm, formed 1616 Collins LLC., and named R.P., a Perevalov family member who was a minor at the time, the entity’s purported sole beneficial owner. On June 14, 2018, the title of the Defendant Properties was transferred to 1616 Collins LLC in violation of the sanctions. R.S. served as Perevalov’s power of attorney for the transfer. After the transfer, R.S. continued to lease the Defendant Properties, collected proceeds derived from the Defendant Properties, and used those proceeds to maintain the Defendant Properties including by making property tax payments.

FBI’s Miami Field Office is investigating the case with support from the Sunny Isles Beach Police Department.

Assistant U.S. Attorneys Marx P. Calderón and Eli Rubin for the Southern District of Florida, Trial Attorneys Sinan Kalayoglu and Lindsay Gorman of the Criminal Division’s Money Laundering and Asset Recovery Section, and Trial Attorney Joshua E. Kurland of the National Security Division’s Counterintelligence and Export Control Section are prosecuting this civil action.

United States v. Osipov, District of Columbia

A superseding indictment, unsealed today, charges Vladislav Osipov, 52, a Russian national who resides in Switzerland, with five new counts of bank fraud in connection with the operation of a 255-foot luxury superyacht that the Department has stated is owned by sanctioned Russian oligarch Viktor Vekselberg.

The indictment states that Vekselberg’s luxury superyacht is the Tango, which was registered in the Cook Islands. The Tango was the first superyacht belonging to a sanctioned individual with close ties to the Russian regime to be seized at the request of the U.S. government following Russia’s February 2022 invasion of Ukraine.

Osipov remains at large. Today, the U.S. State Department offered a reward of up to $1 million for information leading to his arrest or conviction. Previously indicted in November 2022, Osipov is now charged with 17 counts for crimes including bank fraud, punishable by up to 30 years in prison; violating U.S. sanctions punishable by up to 20 years in prison; conspiring to defraud the United States, punishable by up to five years in prison; and money laundering, punishable by up to 20 years in prison.

FBI’s Minneapolis Field Office is investigating the case, with valuable assistance provided by the Spanish Ministry of Justice and the Spanish Guardia Civil.

Assistant U.S. Attorneys Karen P. Seifert and Maeghan Mikorski for the District of Columbia and Trial Attorney Chris M. Cook of the National Security Division’s Counterintelligence and Export Control are prosecuting the case, with valuable assistance provided by Paralegals Brian Rickers and Jorge Casillas, and Legal Assistant Jessica McCormick.

* * *

The Justice Department’s Office of International Affairs provided significant assistance in all of these cases.

These cases were coordinated through the Justice Department’s Task Force KleptoCapture, an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export controls and economic countermeasures that the United States, along with its foreign allies and partners, has imposed in response to Russia’s unprovoked military invasion of Ukraine. Announced by the Attorney General on March 2, 2022, and under the leadership of the Office of the Deputy Attorney General, the task force will continue to leverage all of the department’s tools and authorities to combat efforts to evade or undermine the collective actions taken by the U.S. government in response to Russian military aggression.

An indictment and a criminal complaint are merely allegations. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law. A civil forfeiture complaint is merely an allegation that money or property was involved in or represents the proceeds of a crime. These allegations are not proven until a court awards a judgment in favor of the United States.

HOUSTON - A 44-year-old man has been sentenced for producing and distributing child pornography, announced U.S. Attorney Alamdar S. Hamdani.Adam Michael Ohlsen pleaded guilty May 5. U.S. District Judge Charles R. Eskridge has now ordered Ohlsen to serve 280 and 200 months for the production and distribution convictions, respectively. They will run consecutively for a total 480-month term of imprisonment. Restitution will be determined at a later date. During the hearing, the court learned how deeply and terribly this crime has affected the minor victim who suffered sexual abuse from Ohlsen. The court heard how the dissemination of the child pornography images depicting her being sexually abused will cause ongoing harm to the minor victim. Ohlsen was further ordered to remain on supervised release for the remainder of his life following completion of his prison term. During that time, he will have to comply with numerous requirements designed to restrict his access to children and the internet. Ohlsen will also be ordered to register as a sex offender.The investigation began after authorities discovered Ohlsen was distributing child pornography in 2022 using a Russian image hosting website. Prior to executing a search warrant at his home, law enforcement found evidence he had sexually abused the minor victim and shared images of the abuse on an image sharing platform. Ohlsen confessed to the abuse and distribution. Ohlsen will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.Homeland Security Investigations conducted the investigation with the assistance of the Queensland Police Service.Assistant U.S. Attorney Christine Lu prosecuted the case, which was brought as part of Project Safe Childhood (PSC), a nationwide initiative the Department of Justice (DOJ) launched in May 2006 to combat the growing epidemic of child sexual exploitation and abuse. U.S. Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section leads PSC, which marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children and identifies and rescues victims. For more information about PSC, please visit DOJ’s PSC page. For more information about internet safety education, please visit the resources tab on that page. 

HOUSTON - The United States obtained a warrant to seize a Boeing 737-7EM aircraft owned by PJSC LUKOIL, a Russian multinational oil and gas corporation headquartered in Moscow, Russia. The U.S. District Court for the Southern District of Texas authorized the seizure, finding probable cause that the Boeing aircraft was subject to seizure based on violations of federal law.

Earlier this year, the Department of Commerce issued sanctions against Russia in response to Russia’s invasion of Ukraine. The sanctions impose export controls and license requirements to protect U.S. national security and foreign policy interests. The Russia sanctions expanded prohibitions on the export, reexport or in-country transfer of, among other things, U.S.-manufactured aircraft to or within Russia without a valid license or license exception.

According to court documents, LUKOIL owns the Boeing aircraft – bearing tail number VP-CLR and manufacturer serial number 34865 – which flew into and out of Russia in violation of the Department of Commerce’s Russia sanctions.

“The FBI will remain focused and faithful to our responsibility to protect our U.S. national security and foreign policy interests,” said Special Agent in Charge James Smith of the FBI – Houston Field Office. “We’ll continue to go after individuals who insist on helping Russia advance its hostile and illegal activities, and we’ll continue to seize their valuable possessions, wherever they may be. We thank Homeland Security Investigations (HSI) and the Department of Commerce for their partnership in this case.”

“Once again, the United States, through its experts at the FBI and the Department of Commerce, has laid open a series of shell companies and sham corporations designed to conceal the ownership and illegal movements of controlled technology,” said Task Force KleptoCapture Director Andrew C. Adams. “The aircraft at the center of today’s affidavit was ultimately the property of Lukoil, though that ownership was obscured through a now-public series of holding companies. With today’s unsealed affidavit, aviation, insurance, and financial services companies are made aware of that nesting doll-structure, and can proactively avoid the provision of services that might aid the movement of this tainted aircraft as the United States pursues its seizure.”

“Today’s actions to enforce the powerful export restrictions placed on Russia are our latest coordinated measures that let Vladimir Putin and his allies know they are isolated and we are watching,” said Assistant Secretary of Commerce for Export Enforcement Matthew S. Axelrod. “The Commerce Department’s Office of Export Enforcement continues to vigorously enforce the export laws of the United States and stand with the people of Ukraine against Putin’s war of aggression.”

“By aggressively pursuing the seizure of these assets, we have sent a resounding message to sanctions violators and third-party facilitators around the globe that we are committed to targeting any individual or entity that seeks to blatantly skirt the sanctions, export controls and license requirements imposed by the United States in response to Russia’s unprovoked military invasion of Ukraine,” said Special Agent in Charge Mark Dawson, HSI Houston. “Using our broad investigative and enforcement authorities and global reach, HSI will continue to work alongside our federal partners to protect U.S. national security interests and inflict maximum disruptive effects against anyone who violates these sanctions in an effort to support the Russian government.”

The Boeing last flew into the United States in March 2019 when the plane flew from overseas to Houston with LUKOIL officials, including a Russian oligarch – then LUKOIL president and CEO Vagit Alekperov – on board the aircraft. The Boeing is believed to be in Russia and worth approximately $45 million. Since September 2014, LUKOIL has been subject to sectoral sanctions imposed by the Department of the Treasury’s Office of Foreign Assets Control.

The seizure action is being coordinated through the Justice Department’s Task Force KleptoCapture, an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export controls and economic countermeasures that the United States, along with its foreign allies and partners, has imposed in response to Russia’s unprovoked military invasion of Ukraine. Announced by the Attorney General on March 2 and run out of the Office of the Deputy Attorney General, the task force will continue to leverage all the department’s tools and authorities to combat efforts to evade or undermine the collective actions taken by the U.S. government in response to Russian military aggression.

The FBI’s Houston Field Office, the Department of Commerce’s Bureau of Industry and Security and HSI in Houston are investigating the seizure matter. The investigation into additional aircraft is ongoing.

Assistant U.S. Attorneys John Pearson and Brandon L. Fyffe of the U.S. Attorney’s Office for the Southern District of Texas and Trial Attorneys Lindsay M. Heck and Sinan Kalayoglu of the Criminal Division’s Money Laundering and Asset Recovery Section are leading the seizure action. The U.S. Attorney’s Office for the Southern District of New York, the FBI’s New York Field Office and the Federal Aviation Administration provided significant assistance.

             WASHINGTON – Robert Burke, 62, of Coconut Creek, Florida, a retired Navy Admiral, and two business executives – Yongchul “Charlie” Kim, 50, and Meghan Messenger, 47, both of New York, – were arrested this morning on charges related to their alleged roles in a bribery scheme that involved a U.S. government contract. The charges are contained in a five-count indictment, unsealed today, and relate to an alleged scheme in which the Admiral accepted future employment at the executives’ company in exchange for awarding them a government contract.   

             The indictment was announced by U.S. Attorney Matthew M. Graves, Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division, Deputy Director of Investigative Operations Grant A. Fleming of the Defense Criminal Investigative Service (DCIS), Special Agent in Charge Stanley A. Newell of the DCIS Transnational Operations Field Office, Special Agent in Charge Greg Gross of the Naval Criminal Investigative Service (NCIS) Economic Crimes Field Office, and Assistant Director Michael D. Nordwall of the FBI’s Criminal Investigative Division made the announcement.  

              From 2020 to 2022, Robert Burke was a four-star Admiral who oversaw Naval operations in Europe, Russia, and most of Africa, and commanded thousands of civilian and military personnel. Yongchul “Charlie” Kim and Meghan Messenger were the co-CEOs of a company (“Company A”) that provided a workforce training pilot program to a small component of the Navy from August 2018 through July 2019. The Navy terminated a contract with Company A in late 2019 and directed Company A not to contact Burke.

            Despite the Navy’s instructions, Kim and Messenger then allegedly met with Burke in Washington, D.C., in July 2021, in an effort to reestablish Company A’s business relationship with the Navy. At the meeting, the charged defendants allegedly agreed that Burke would use his position as a Navy Admiral to steer a sole-source contract to Company A in exchange for future employment at the company. They allegedly further agreed that Burke would use his official position to influence other Navy officers to award another contract to Company A to train a large portion of the Navy with a value Kim allegedly estimated to be “triple digit millions.” 

            In furtherance of the conspiracy, in December 2021, Burke allegedly ordered his staff to award a $355,000 contract to Company A to train personnel under Burke’s command in Italy and Spain. Company A performed the training in January 2022. Thereafter, Burke allegedly promoted Company A in a failed effort to convince a senior Navy Admiral to award another contract to Company A. To conceal the scheme, Burke allegedly made several false and misleading statements to the Navy, including by creating the false appearance that Burke played no role in issuing the contract and falsely implying that Company A’s employment discussions with Burke only began months after the contract was awarded. 

            In October 2022, Burke began working at Company A at a yearly starting salary of $500,000 and a grant of 100,000 stock options. 

            “As alleged in the indictment, Admiral Burke used his public office and his four-star status for his private gain,” said U.S. Attorney Matthew M. Graves. “The law does not make exceptions for admirals or CEOs.  Those who pay and receive bribes must be held accountable.  The urgency is at its greatest when, as here, senior government officials and senior executives are allegedly involved in the corruption.” 

            “Today’s indictment exemplifies our unwavering commitment to eradicating fraud within the DoD,” said Deputy Director, Grant A. Fleming, Department of Defense, Office of Inspector General’s, Defense Criminal Investigative Service (DCIS). “Together with our federal partners, DCIS will persist in dismantling attempts to defraud the U.S. Government.”

            “NCIS takes every allegation of corruption within the Department of the Navy seriously, regardless of rank or position,” said Special Agent in Charge Greg Gross of the NCIS Economic Crimes Field Office. “NCIS and our partners remain committed to rooting out criminality that degrades public trust in the Department of the Navy.”

            “Burke allegedly steered a lucrative contract to Kim and Messenger's company in exchange for the promise of future employment and then lied to try to conceal the scheme,” said FBI Special Agent in Charge David J. Scott. “As a four-star admiral, Burke not only cheated U.S. taxpayers but also did a disservice to military personnel under his command. As this indictment demonstrates, the FBI and our partners remain committed to investigating and prosecuting corrupt officials regardless of their rank or title.”

            Burke, Kim, and Messenger are each charged with conspiracy to commit bribery and bribery. Burke is also charged with performing acts affecting a personal financial interest and concealing material facts from the United States. If convicted, Burke faces a maximum penalty of 30 years in prison, and Kim and Messenger each face a maximum penalty of 20 years in prison.

            This case is being investigated by the Defense Criminal Investigative Service, Naval Criminal Investigative Service, and the FBI’s Washington Field Office.

            It is being prosecuted by Trial Attorneys Trevor Wilmot and Kathryn E. Fifield of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Joshua Rothstein for the District of Columbia are prosecuting the case.

            An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

A criminal complaint was unsealed today charging Hossein Akbari, 63, and Reza Amidi, 62, both of Iran, and an Iranian company, Rah Roshd Company (Rah Roshd), with conspiring to procure U.S. parts for Iranian Unmanned Aerial Vehicles (UAVs, also known as drones), conspiring to provide material support to the IRGC – a designated foreign terrorist organization – and conspiring to commit money laundering.Akbari is the Chief Executive Officer (CEO) of Rah Roshd. Amidi is the company’s commercial manager and was previously the commercial manager of Qods Aviation Industries (QAI), an Iranian state-owned aerospace company. They are both citizens of Iran and remain at large.“Today’s charges lay bare how U.S.-made technology ended up in the hands of the Iranian military to build attack drones,” said Sue J. Bai, head of the Justice Department’s National Security Division. “The Justice Department will continue to put maximum pressure on the Iranian regime. We will relentlessly dismantle illicit supply chains funneling American technology into the hands of Iran’s military and terrorist organizations and pursue those complicit in operations that threaten our country.”“As alleged in the complaint, the defendants conspired to obtain U.S.-origin parts needed to manufacture drones for military use in Iran and send those parts to Iran in violation of export control laws,” said U.S. Attorney John J. Durham for the Eastern District of New York. “The charges filed today demonstrate the commitment by my office and our law enforcement partners to dismantle illicit supply chains and prosecute those who unlawfully procure U.S. technology in support of a foreign terrorist organization. The IRGC and QAI have been core players in the Iranian military regime’s production of drones, which threaten the lives of civilians, U.S. personnel and our country’s allies. These charges should serve as a warning to those who violate U.S. export control laws and who unlawfully seek to aid Iran’s drone program.”“The allegations in this case demonstrate the lengths Iranian companies take to evade U.S. sanctions, victimize U.S. businesses, and support the IRGC's production of drones,” said Assistant Director Roman Rozhavsky of the FBI's Counterintelligence Division. “The FBI and our partners will use all authorities to stop those who seek to evade sanctions and engage in money laundering schemes that support terrorist activities and threaten the lives and interests of Americans and our allies.”According to court documents, Akbari and Amidi operate Rah Roshd which procures and supplies advanced electronic, electro-optical and security systems to the Government of Iran and designs, builds, and manufactures ground support systems for UAVs. Rah Roshd’s clients include the IRGC and several Iranian state-owned aerospace companies and drone manufacturers, including QAI, Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL), Shahed Aviation Industries Research Center (SAIRC) and Shahid Bakeri Industrial Group (SBIG).Between January 2020 and the present, Amidi and Akbari used Rah Roshd in furtherance of a scheme to evade U.S. sanctions and procure U.S.-origin parts for use in Iranian-manufactured UAVs, including the Mohajer-6 UAV. At least one of those parts was manufactured by a Brooklyn, New York-based company (Company-1). In September 2022, the Ukranian Air Force shot down an Iranian-made Mohajer-6 drone used by the Russian military in Ukraine. The drone recovered by the Ukrainian Air Force contained parts made by several U.S. companies, including Company-1)To facilitate their scheme, Amidi and Akbari falsely purported to represent companies other than Rah Roshd, including a company based in the United Arab Emirates (UAE) (Company-2) and a company based in Belgium (Company-3). The defendants used a “spoofed” email address, containing a misspelled version of Company-2’s name, to communicate regarding the procurement of parts, including parts manufactured by U.S. companies. The defendants also used various “front” or “shell” companies to pay for UAV parts and to obfuscate the true end destination and the true identities of the sanctioned end users, including QAI and the IRGC, which were acquiring U.S.-made parts through Rah Roshd. Amidi and Akbari also used aliases to obfuscate their true identities in furtherance of the scheme.Additionally, the defendants conspired to provide material support to the IRGC by providing goods and services, including constructing military shelters, providing cameras and drone field hangers and conspiring to procure drone parts as well as parts to operate drones, including servo motors, pneumatic masts, and engines, for the benefit of the IRGC’s military campaign. The investigation uncovered correspondence from the IRGC, signed by the head of the UAV Command for the IRGC’s Aerospace Force, thanking Rah Roshd for its work on behalf of the IRGC and praising Rah Roshd’s achievements in designing and manufacturing “servo motors” for defense equipment. The letter also included a quote from the Supreme Leader of Iran regarding the importance of self-sufficiency and domestic production to strengthen Iran’s economy and “disappoint the enemies of the Islamic Republic.”  The letter also noted continued efforts of Rah Roshd “in strengthening the defensive capabilities of the Islamic Republic of Iran.” Both Amidi and Akbari possessed documents indicating that they had purchased servo motors for delivery to Iran, including a servo motor contained in the Mohajer-6 drone. Akbari also emailed supplier companies located in the People’s Republic of China (PRC) and noted that he was purchasing parts for drones to be shipped to Iran.Finally, Amidi and Akbari conspired to commit money laundering. They used at least three shell companies, which were all based in the UAE, to pay a PRC-based company that sent invoices to Rah Roshd for the sale of motors. Those payments were processed through U.S.-based correspondent bank accounts. The defendants also used two of these shell companies to pay a separate PRC-based company for the sale of pneumatic masts, which are a component of the operation of the Mohajer-6 drone.Concurrent with today’s criminal complaint, the Department of Treasury announced sanctions targeting a network of six entities and two individuals based in Iran, the UAE, and the PRC responsible for the procurement of UAV components on behalf of QAI — a leading manufacturer for Iran’s UAV program. According to the Treasury, this network has also facilitated procurement for other entities in Iran's military-industrial complex, including Iran Aircraft Manufacturing Industrial Company (HESA) and SBIG. Today’s action marks the second round of sanctions targeting Iranian weapons proliferators since the President issued National Security Presidential Memorandum 2 on Feb. 4, ordering a campaign of maximum pressure on Iran.Assistant U.S. Attorneys Nina C. Gupta and Lindsey R. Oken for the Eastern District of New York are prosecuting the case, with the assistance of Paralegal Specialist Rebecca Roth, Trial Attorney Scott Claffee of the National Security Division’s Counterintelligence and Export Control Section, and Trial Attorney Charles Kovats of the National Security Division’s Counterterrorism Section.Today’s actions were coordinated through the Justice and Commerce Departments’ Disruptive Technology Strike Force. The Disruptive Technology Strike Force is an interagency law enforcement strike force co-led by the Departments of Justice and Commerce designed to target illicit actors, protect supply chains, and prevent critical technology from being acquired by authoritarian regimes and hostile nation states.A criminal complaint is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

A four–count federal grand jury indictment returned in Austin and unsealed today charges three foreign nationals – a Russian citizen and two Bulgarian citizens – with violating the International Emergency Economic Powers Act (IEEPA), Export Control Reform Act (ECRA), and a money laundering statute in a scheme to procure sensitive radiation-hardened circuits from the U.S. and ship those components to Russia through Bulgaria without required licenses.

That announcement was made today by U.S. Attorney Gregg N. Sofer; Assistant Attorney General for National Security John C. Demers; P. Lee Smith, Performing the Non-exclusive Functions and Duties of the Assistant Secretary for Export Enforcement at the Department of Commerce; FBI San Antonio Division Special Agent in Charge Christopher Combs; and Defense Criminal Investigative Service (DCIS) Southwest Field Office Special Agent in Charge Michael Mentavlos.

The indictment alleges that 48-year-old Russian national Ilias Sabirov, 70-year-old Bulgarian national Dimitar Dimitrov and 46-year-old Bulgarian national Milan Dimitrov used Bulgarian company Multi Technology Integration Group EEOD (MTIG) to receive controlled items from the U.S. and send them to Russia.  Under U.S. export control law, the goods could not be shipped to Russia without the permission of the U.S. government.

According to the indictment, Sabirov is the head of two Russian companies--Cosmos Complect and OOO Sovtest Comp.--and controls MTIG.  Both Dimitar Dimitrov and Milan Dimitrov worked for Sabirov at Cosmos Complect and MTIG.  

In 2014, the defendants met with the supplier of the radiation-hardened components in Austin, and were informed that radiation-hardened circuits could not be shipped to Russia because of U.S. trade restrictions.  Stymied by U.S. law, Sabirov established MTIG in Bulgaria and bought the controlled electronic circuits.  The radiation-hardened properties of these circuits made them resistant to damage or malfunction in the harsh outer-space environment. Export of the parts was controlled by the U.S. government for these very reasons.  The parts were shipped to Bulgaria in 2015, and MTIG soon thereafter shipped them to Sabirov’s companies in Russia.  OOO Sovtest Comp. transferred over $1 million to MTIG for the controlled U.S. parts. 

In the same timeframe, MTIG—at Sabirov’s direction—ordered over $1.7 million in other electronic components produced by another U.S. electronics manufacturer.  MTIG bought these parts to fulfill part of its contract with OOO Sovtest Comp.  Again, the parts were shipped from the U.S. to Bulgaria, where they were merely repackaged and onward shipped to Russia.

In late 2018, a Department of Commerce Export Control Officer interviewed Milan Dimitrov during a visit at MTIG to determine whether the radiation-hardened components were still in MTIG’s possession in Bulgaria.  Milan Dimitrov, among other things, fraudulently denied sending the components to Russia.

“Today’s indictment demonstrates that the United States Attorney’s Office, the Department of Justice and our federal partners will follow those who seek to evade U.S. export enforcement laws wherever our investigations lead.  National security remains our highest priority.  We must never allow our most sensitive technology to fall into the hands of those who would seek to use it against us,” said U.S. Attorney Gregg N. Sofer.

“Time and again, we find the Russians attempting to get access to sensitive American technology.  The defendants here are charged with exporting radiation-hardened chips to Russia, knowing that it was illegal to do so and establishing a business in Bulgaria to circumvent U.S. enforcement authorities,” said Assistant Attorney General for National Security John C. Demers.  “I am gratified by our whole-of-government response to this flagrant example of U.S. export controls evasion.”

“The Office of Export Enforcement in partnership with the FBI and DCIS uncovered an illicit procurement network that was diverting radiation-hardened integrated circuits from the United States through a Bulgarian front company to entities in Russia,” said P. Lee Smith, Performing the Non-exclusive Functions and Duties of the Assistant Secretary for Export Enforcement at the Department of Commerce. “Today’s announcement and related action by the Commerce Department to place the parties on the Entity List represent a collaborative whole-of-government approach to protecting sensitive, controlled U.S. technology, which is critical to our national security.”

“Today’s indictment details the efforts our adversaries will take to obtain our sensitive technology and demonstrates that the U.S. will hold any individuals, organizations, and nations, who willfully violate our export laws accountable,” said FBI Special Agent in Charge Christopher Combs. “The FBI and our partners will work vigorously to protect and defend the national security of our country.”

“This investigation underscores the Defense Criminal Investigative Service's commitment to safeguarding our nation's most sensitive technologies and preventing those technologies from getting into the hands of our adversaries,” said DCIS Southwest Field Office Special Agent in Charge Michael Mentavlos.  “DCIS, in consort with our law enforcement partners, will continue to aggressively identify, disrupt, and bring to justice those who attempt to circumvent export control laws and threaten the integrity of U.S. military technology.”

The indictment charges Sabirov, Dimitar Dimitrov and Milan Dimitrov with two counts related to violations of IEEPA and one count of money laundering.  The indictment also charges Milan Dimitrov with one count of false statements to the government. Each count charged in the indictment calls for up to 20 years in federal prison upon conviction. 

In conjunction with the unsealing of these charges, the Department of Commerce is designating Ilias Sabirov, Dimitar Dimitrov, Milan Dimitrov, Mariana Marinova Gargova, MTIG EOOD, Cosmos Complect and OOO Sovtest Comp., adding them to its Bureau of Industry and Security Entity List.  Designation on the Entity List imposes a license requirement before any commodities can be exported from the U.S. to these persons or companies and establishes a presumption that no such license will be granted.

The Entity List identifies foreign parties that are prohibited from receiving some or all items subject to the Export Administration Regulations (EAR) unless the exporter secures a license. Those persons present a greater risk of diversion to weapons of mass destruction (WMD) programs, terrorism or other activities contrary to U.S. national security or foreign policy interests. Commerce – Office of Export Enforcement can add to the Entity List a foreign party, such as an individual, business, research institution or government organization, for engaging in activities contrary to U.S. national security and/or foreign policy interests. In most instances, license exceptions are unavailable for the export, re-export or transfer (in-country) to a party on the Entity List of items subject to the EAR. Rather, a prior license is required, usually subject to a policy of denial.

Commerce – Office of Export Enforcement and the FBI are investigating this case with assistance from DCIS.  The government’s case is being prosecuted by Assistant U.S. Attorneys Michael C. Galdo and G. Karthik Srinivasan of the Western District of Texas, as well as Trial Attorney Thea D. R. Kendler of the Justice Department’s National Security Division. The Justice Department’s Office of International Affairs provided investigatory assistance.

In all cases, defendants are presumed innocent until and unless proven guilty.  The indictment merely contains allegations of criminal activity.

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The year 2020 marks the 150th anniversary of the Department of Justice.  Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.

Federal, state and local authorities have arrested 13 individuals, including current and former University of Texas (UT) students, charged in connection with trafficking LSD, fentanyl and methamphetamine pills to UT students in Austin.

That announcement was made today by U.S. Attorney Gregg N. Sofer; Drug Enforcement Administration (DEA) Special Agent in Charge Steven S. Whipple, Houston Division; FBI Special Agent in Charge Christopher Combs, San Antonio Field Office; Internal Revenue Service-Criminal Investigation (IRS-CI) Special Agent in Charge Richard D. Goss, Houston Field Office; Travis County Sheriff Sally Hernandez; Austin Police Chief Brian Manley; and Lakeway Police Chief Todd Radford.

Those arrested include: 23-year-old Varun Prasad of Austin; 26-year-old Charles Zenker of Houston; 68-year-old Benny Daneshjou of Austin; 26-year-old Ashley Larue of Austin; 21-year-old Drew Zarate of Austin; 32-year-old Christopher Edwards of Portland, Ore.; 21-year-old Jacob Schelling of Cypress; 22-year-old Madison Scott of Houston; 21-year-old Adrian Andreescu of Plano; 21-year-old Nikit Shingari of Austin; 21-year-old Nolan Fogleman of Austin; 23-year-old Samuel Parry of Austin; and 27-year-old Brandon Carpenter of Austin. All of the defendants are charged with conspiracy to possess with intent to distribute a controlled substance. Prasad, Daneshjou, Larue and Zarate are also charged with conspiracy to commit money laundering.

The defendants allegedly conspired to distribute LSD, fentanyl and methamphetamine in the Austin metropolitan area and other locations since April 2019 and also allegedly conspired to launder the financial proceeds of unlawful activities. 

Search warrants executed yesterday in conjunction with arrest warrants resulted in the seizure of large quantities of fentanyl, Adderall pills, Alprazolam (Xanax), LSD, marijuana and psilocybin (hallucinogenic mushrooms).  Investigators also seized several firearms and approximately $100,000 in U.S. currency.  Prior to yesterday’s enforcement action, law enforcement officers arrested four other subjects and seized quantities of fentanyl methamphetamine, heroin, cocaine, LSD, MDMA, Benzodiazepine and other opioids during this investigation.  Approximately $163,000 in assets and U.S. currency were also seized.

“Make no mistake about it.  These are not pills being carefully manufactured and tested by trusted, regulated pharmaceutical companies.  During the course of this investigation, two of the targets died from drug overdoses,” said U.S. Attorney Sofer. “When unsuspecting college kids and other drug seekers put these pills in their mouths, they are playing Russian roulette. They are gambling that profit-seeking drug dealers did not place lethal doses of unknown chemicals or fentanyl in these pills.” 

“Drug overdose is a leading cause of preventable, injury-related deaths in our nation.  This coordinated law enforcement operation dismantled an enterprise responsible for the distribution of counterfeit pharmaceuticals that contained fentanyl and methamphetamine, but were clandestinely manufactured to mimic the prescription pharmaceuticals Oxycodone and Adderall.  We caution people to never consume pharmaceuticals unless under licensed medical care and sourced from a licensed pharmacy.  A miniscule amount, as small as a couple grains of salt, of some of these illicit drugs can result in death,” said DEA Special Agent in Charge Whipple.

The Austin Tactical Diversion Squad, a law enforcement task force targeting criminal pharmaceutical diversion and counterfeit drug trafficking in Central Texas, conducted this investigation dubbed Operation Spider Web.  Partner agencies include DEA, FBI, IRS-CI, Austin Police Department, Travis County Sheriff’s Office, Lakeway Police Department, Cedar Park Police Department and the Texas National Guard Joint Counterdrug Task Force. 

“The laundering of illegal drug profits is as important and essential to drug traffickers as the very distribution of their illegal drugs,” said IRS-CI Special Agent in Charge Goss. “Without these ill-gotten gains, the traffickers cannot finance their organizations.  By following the money trail, Special Agents with the IRS are able to assist our law enforcement partners with dismantling drug trafficking organizations and those that facilitate their activities.”

“We value the relationship we have with our federal partners, and through our collaborative efforts have removed a significant amount of illegal drugs off the streets of Austin. This has potentially saved many people from the dangers and risks associated with illegal drug use and furthers our mission of keeping Austin residents safe,” stated Austin Police Chief Manley.

“We are honored to serve alongside such professional agencies to combat illicit drug distribution in our various communities. This case is emblematic of the partnerships it takes in today’s times to successfully investigate and prosecute these types of complex crimes,” stated Lakeway Police Chief Radford.

Upon conviction of the drug conspiracy charge, the defendants face between 10 years and life in federal prison. Upon conviction of the money laundering conspiracy charge, the defendants face up to 20 years in federal prison.

Assistant U.S. Attorneys Mark Marshall and Robert Almonte are prosecuting this case on behalf of the government.

It is important to note that an indictment is merely a charge and should not be considered as evidence of guilt.  The defendants are presumed innocent until proven guilty in a court of law.

Drug overdose deaths and opioid-involved deaths continue to increase in the U.S.  Deaths from drug overdose are up among both men and women, all races and adults of nearly all ages with more than three out of five drug overdose deaths involving an opioid.  More than 130 people die every day in the U.S. after overdosing on opioids while methamphetamine continues to be one of the most commonly misused stimulant drugs in the world and is the drug that most contributes to violent crime.

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The year 2020 marks the 150th anniversary of the Department of Justice.  Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.

     TUCSON, Ariz. – Four members of an international fraud syndicate have been sentenced to federal prison for conspiracy to commit bank fraud and aggravated identity theft in connection with their scheme to manufacture and use fraudulent credit cards using the personally identifiable information of US-based individuals.

 

     Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Elizabeth A. Strange for the District of Arizona, and Special Agent in Charge Scott Brown of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) Phoenix Field Office made the announcement.

 

     “Our office is dedicated to combatting transnational fraud and identity theft,” said Acting U.S. Attorney Strange.  “The scope of the fraud scheme in this case was staggering, and we commend our law enforcement partners for apprehending the perpetrators and bringing them to justice.”

 

     “This appalling international scheme illustrates the lengths to which fraudsters will go to game the system for financial gain,” said HSI Special Agent Brown. “We will continue to work tirelessly with our law enforcement partners to hold shameless, brazen fraudsters accountable for their crimes.”

 

     According to admissions made in connection with their guilty pleas, the defendants participated in a conspiracy that bought stolen personally identifiable information, credit card account information, and other financial information over the Internet from individuals located in Ukraine, Tajikistan, and Russia, among other countries.  The stolen personally identifiable information and stolen credit card account information were then used to unlawfully manufacture fraudulent credit cards. 

 

     Participants in the fraud scheme traveled on multiple occasions from Mexico into the United States and used the fraudulent credit cards to purchase gift cards and high end merchandise, such as iPhones, laptop computers, and designer clothing, from retailers throughout Arizona and elsewhere in the United States.  After purchasing merchandise and gift cards, the co-conspirators transported the unlawfully purchased merchandise and gift cards to Mexico for future sale and profit for scheme participants.  The defendants admitted in their guilty pleas that they collectively possessed at least 5,684 fraudulent credit cards resulting in the loss of hundreds of thousands of dollars.

 

     The defendants each pleaded guilty to conspiracy to commit bank fraud and aggravated identity theft.  Today, Rey Martinez-Lopez, 33, of Hermosillo, Sonora, Mexico, was sentenced to four years and six months in prison, to be followed by five years of supervised release by U.S. District Judge Rosemary Marquez of the District of Arizona. 

 

     Judge Marquez sentenced the other three defendants to the following prison terms:

 

On Sept. 29, Anwar Barragan Flores, 39, of Hermosillo, Sonora, Mexico, was sentenced to seven years in prison, to be followed by five years of supervised release. 

On Sept. 12, Jorge Williams-Araiza, 38, of Hermosillo, Sonora, Mexico, was sentenced to three years and two months in prison, to be followed by five years of supervised release. 

On Aug. 23, Javier Ramirez-Villegas, 36, of Hermosillo, Sonora, Mexico, was sentenced to four years in prison to be followed by five years of supervised release.   The defendants’ restitution will be determined by the Court at a later hearing, which has not been scheduled yet. 

     The investigation in this case was conducted by HSI Nogales. The prosecution was handled by Assistant U.S. Attorney Matthew G. Eltringham, Organized Crime and Drug Enforcement Task Force, District of Arizona, Tucson and Trial Attorney Rebecca A. Staton of the Criminal Division’s Organized Crime and Gang Section.

 

CASE NUMBER:            CR-0184-TUC JGZ (LAB)

RELEASE NUMBER:    2017-110_Martinez_Lopez_etal

 

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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/

Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.

 

SAN DIEGO – U.S. Marine Corps Colonel Enrico DeGuzman pleaded guilty to a bribery charge today, admitting that he accepted more than $67,000 in extravagant meals, drinks, entertainment and hotel stays in Hong Kong, Singapore, and Tokyo from foreign defense contractor Leonard Glenn Francis.

DeGuzman admitted that in return for this and other things of value, he corruptly used his official position to assist Francis, the owner and CEO of Singapore-based Glenn Defense Marine Asia, a ship husbanding company that serviced U.S. Navy ships in the Asia Pacific region.  DeGuzman admitted that he endeavored to influence Navy ships into ports serviced by GDMA; he shared confidential Navy information with Francis in order to help GDMA; and he helped with evaluating and indoctrinating potential new Navy members into Francis’s cabal.

In one instance, DeGuzman joined Francis and others for a $40,000 meal that featured foie gras terrine, duck leg confit, ox-tail soup, and roasted Chilean sea bass, paired with expensive wine and champagne, followed by digestifs, cigars and overnights at the Shangri La - all at Francis’s expense.

DeGuzman was one of nine members of the U.S. Navy’s Seventh Fleet indicted by a federal grand jury in March 2017 for conspiring with Francis and for receiving bribes.  DeGuzman is the second of the Seventh Fleet defendants to plead guilty. The trial of the remaining defendants was scheduled to begin November 1, 2021, but yesterday it was postponed until February 7, 2022.  The remaining defendants - who are accused of trading military secrets and substantial influence for sex parties with prostitutes and luxurious dinners and travel - include U.S. Navy Rear Admiral Bruce Loveless; Captains David Newland, James Dolan, Donald Hornbeck and David Lausman; Commander Stephen Shedd; and Commander Mario Herrera.

The overarching fraud and bribery case has resulted in federal criminal charges against 34 U.S. Navy officials, defense contractors and the GDMA corporation. So far, 27 of those have pleaded guilty, admitting collectively that they accepted millions of dollars in luxury travel and accommodations, meals, or services of prostitutes, among many other things of value, from Francis in exchange for helping GDMA win and maintain contracts and overbill the Navy by over $35 million.

DeGuzman served on the Seventh Fleet Staff as the Fleet Marine Officer from July 2004 to July 2007.  In this role, DeGuzman was responsible for coordinating the mission of the U.S. Marine Corps within the Seventh Fleet area of responsibility.  From July 2007 to January 1, 2011, DeGuzman served as the Assistant Chief of Staff of Operations for U.S. Marine Corps Forces, Pacific, and thereafter, DeGuzman served in a civilian capacity as the Deputy Chief of Staff of Operations for U.S. Marine Corps Forces, Pacific.

The U.S. Navy’s Seventh Fleet represents a vital piece of the United States military’s projection of power as well as American foreign policy and national security. The largest numbered fleet in the U.S. Navy, the Seventh Fleet is comprised of 60-70 ships, 200-300 aircraft and approximately 40,000 Sailors and Marines. The Seventh Fleet is responsible for U.S. Navy ships and subordinate commands that operate in the Western Pacific throughout Southeast Asia, Pacific Islands, Australia, and Russia and the Indian Ocean territories, as well ships and personnel from other U.S. Navy Fleets that enter the Seventh Fleet’s area of responsibility.

“With every extravagant meal, Enrico DeGuzman violated his duty to serve the United States with honor and integrity,” said Acting U.S. Attorney Randy Grossman. “Today those choices have caught up to him, and he has been held accountable.” Grossman commended the federal prosecutors and agents who diligently pursued this case.

“Mr. DeGuzman knowingly misused his position of trust as a senior U.S. Marine Corps officer to actively work with, and advocate for, a corrupt U.S. Navy contractor, while expecting and receiving lavish gifts in return, all at the expense of the U.S. Navy and the national security interests of the United States,” said Kelly P. Mayo, the Director of the Department of Defense Office of Inspector General, Defense Criminal Investigative Service (DCIS).   “As this case underscores, DCIS will work tirelessly with its partners to root out corruption within the Department of Defense and its components in order to maintain the trust, faith, and precious resources of the American taxpayer.”

“Colonel DeGuzman put his personal interests ahead of protecting the nation,” said NCIS Director Omar Lopez.  “NCIS and our law enforcement partners will continue to aggressively pursue any act of bribery and corruption involving Mr. Francis and GDMA or otherwise as these reprehensible acts diminish the operational readiness of the fleet and warfighter superiority of the USMC and U.S. Navy.”

According to his plea agreement, DeGuzman admitted to receiving the following bribes from Francis:

On February 17, 2006, during the U.S.S. Blue Ridge's port visit to Hong Kong, DeGuzman and others dined and drank at Francis’s expense at the Petrus Restaurant at a cost of more than $20,000. To conceal and cover up their corrupt relationship, Francis created fraudulent receipts for the Petrus dinner that DeGuzman knew represented a small fraction of the actual cost of the dinner. While in Hong Kong, DeGuzman and others also stayed at the Shangri-La Hotel paid for, in part, by Francis.

On March 9, 2006, during the U.S.S. Blue Ridge’s port visit to Singapore, DeGuzman and others dined with Francis at the Jaan Restaurant in Singapore. Prior to dinner, DeGuzman and others enjoyed entertainment and cocktails on the exclusive rooftop helipad. At dinner, enjoyed foie gras terrine, duck leg confit, ox-tail soup, and roasted Chilean sea bass, paired with expensive wine and champagne, followed by digestifs and cigars.  The estimated cost to Francis was $40,000.

On September 9, 2006, DeGuzman and others dined at Francis's expense at the New York Grill in Tokyo, Japan, and stayed at Francis's expense at the Park Hyatt Hotel, all at a total cost to Francis of approximately $30,000.

During the U.S.S. Blue Ridge's port visit to Singapore from about February 22-27, 2007, Francis paid for the hotel expenses for DeGuzman and others at the Shangri-La Hotel, Singapore at a total cost to Francis of approximately $50,000. As part of this port visit, DeGuzman and others dined with Francis at Francis's expense on multiple occasions, including at the Blu Restaurant within the Shangri-La Hotel, and at the Jaan Restaurant atop the Shangri-La Hotel.

On March 24, 2007, DeGuzman and others attended a multi-course dinner hosted by Francis at the Oak Door in Tokyo, Japan, during which was served, at Francis's expense, foie gras, Lobster Thermidor, and Sendai Tenderloin, and for dessert, “Liberté Sauvage,” the winning cake of the 10th Coupe du Monde de la Patisserie 2007, followed by cognac and cigars. During the event, the attendees posed for a photograph wearing custom-made GDMA neckties.

 

In a moment of candor encapsulating these corrupt relationships, just before DeGuzman departed Seventh Fleet assignment, he warned Francis in an email dated July 7 2007, “[U]nfortunately, I don't think I'll be able to influence people [in my next assignment] like I did there at 7th Fleet.”

DEFENDANT                                                Case Number: 17-CR-0623-JLS                            

Enrico DeGuzman                                          Age: 63                     Las Vegas, Nevada

SUMMARY OF CHARGES

Bribery of a Public Official, in violation of 18 U.S.C. § 201(b)(2)

Maximum Penalty: Fifteen years in prison, $250,000 fine

INVESTIGATING AGENCIES

Defense Criminal Investigative Service

Naval Criminal Investigative Service

Defense Contract Audit Agency

 

Assistant U. S. Attorney Alexandra F. Foster (619) 546-6735

NEWS RELEASE SUMMARY – January 21, 2021

SAN DIEGO – Kirill Victorovich Firsov, a Russian citizen, pleaded guilty in federal court today to a cybercrime, admitting that he was the administrator of a website that catered to cyber criminals by virtually selling items such as stolen credit card information, other personal information and services to be used for criminal activity.

According to the plea agreement, Firsov was well-compensated as the administrator of DEER.IO, an online platform which catered to cyber criminals. DEER.IO was a Russian-based platform that allowed criminals to set up cyber storefronts and sell illegal products or services. DEER.IO started operations as of at least October 2013, and, as of March 2020, had approximately 3,000 shops with sales exceeding $17 million. 

DEER.IO offered a turnkey online storefront design and hosting platform, from which cybercriminals could advertise and sell their products, such as harvested credentials, hacked servers, and services, such as assistance performing a panoply of cyber hacking activities.  As detailed above, a criminal could simply “sign up,” “configure wallets to receive funds,” “upload products,” and “get money.”

Once the criminal paid to set up their store on the DEER.IO platform, the site then guided the newly-minted shop owner through an automated set-up to upload the products and services on offer through the shop and configure crypto-currency wallets to collect payments for the purchased products and/or services. A cybercriminal who wanted to sell contraband or offer criminal services through DEER.IO could purchase a storefront directly from the DEER.IO website for 800 Rubles (approximately $12.50) per month. The monthly fee was payable by Bitcoin or a variety of online Russian payment methods such as WebMoney, a Russian based money transfer system similar to PayPal.

The shop owner had the option to purchase a storefront name linked to DEER.IO or one its subdomains, like DEER.ST, DEER.IS or DEER.EE (e.g., https://[SHOP NAME].deer.io, such as ONLYFB.DEER.IO, SHIKISHOP.DEER.IO and SELLACCSS.DEER.IS), or a custom name (e.g., https://[SHOP NAME], such as SQLBAZAR.SHOP and ISIS.RENTS.HOUSE), which directed the prospective buyer to the storefront infrastructure hosted on DEER.IO.

A cybercriminal who wanted to purchase from storefronts on the DEER.IO website could use a web browser to navigate to the DEER.IO domain, which contained a search function that allowed individuals to search a catalog for specific items or browse popular storefronts containing items to purchase. Any purchases were conducted using cryptocurrency, such as Bitcoin, or through Russian-based money transfer systems. For example, as reflected above, a cybercriminal could purchase stolen Uber accounts with associated credit card information from SHIKISHOP.DEER.IO.  To make these purchases, the prospective buyer just needed to click on the cart on the right-hand side of the screen.

An initial scan through DEER.IO storefronts revealed thousands of compromised accounts posted for sale, including Personally Identifiable Information (PII) files containing full U.S. Social Security Numbers, dates of birth and victim addresses. Many of these victims were located in Europe and the United States, including victims in San Diego.

Firsov is set for sentencing before Judge Cynthia Bashant on April 12, 2021.

“This was one-stop shopping for criminals,” said U.S. Attorney Robert Brewer. “Cybercrime is one of the most pervasive threats facing our country. Data is being stolen and sold on the Dark Web every day, and we are devoting significant resources to combatting this serious problem.” Brewer commended the excellent work of Assistant U.S. Attorney Alexandra F. Foster and the FBI agents on this case.

“The internet allows cybercriminals and our adversaries to attack Americans in new and unexpected ways.  Therefore, the FBI is constantly pivoting to staying ahead of the evolving nature of cyber threats,” said Suzanne Turner, Special Agent in Charge of FBI's San Diego Field Office.  “The seizure of the DEER.IO website and conviction of Firsov is an example of the FBI cyber program’s investigative prowess and jurisdictional reach in order to identify, locate and bring to justice anyone who attempts to profit from harm to U.S. persons, businesses and infrastructure.”

If victimized in a cyber security incident, the FBI encourages companies to immediately contact the FBI.  Specialized cyber agents will work with companies to protect company information and the personal data of its customers. Please contact the FBI San Diego's cyber program by calling our field office at (858) 320-1800 or submitting tips at Internet Crime Complaint Center (IC3).

DEFENDANT                                            Case Number 20cr1182-BAS                                    

Kirill Victorovich Firsov                             Age:     29                      Moscow, Russia

SUMMARY OF CHARGE

Unauthorized Solicitation of Access Devices (18 U.S.C. § 1029(a)(6))

Maximum Penalty: Ten years in prison, $250,000 fine.

INVESTIGATING AGENCY

FBI

SHERMAN, Texas– A Ponte Vedra, Florida, man has pleaded guilty to international smuggling violations in the Eastern District of Texas, announced U.S. Attorney Brit Featherston today.

Eddy Johan Coopmans, 61, pleaded guilty to conspiracy to smuggle goods out of the United States and to violate the International Emergency Economic Powers Act, before U.S. Magistrate Judge Christine Nowak on Oct. 4, 2022.

According to information presented in court, Coopmans and another individual who is a foreign national agreed to illegally export controlled technology, specifically Space Grade Field Programmable Gate Array Circuits, to Russia and China.  As part of their scheme, Coopmans and his co-conspirator communicated with individuals whom they believed would help them smuggle the circuits, paid them approximately $1,217,100 USD, and made false statements to government regulators.

Coopmans was indicted by a federal grand jury on August 13, 2019.  He faces up to 5 years in federal prison.  The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors.  A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

This case is being investigated by Homeland Security Investigations and the Federal Bureau of Investigation with assistance from Department of Commerce - Bureau of Industry and Security; Department of Defense Criminal Investigative Services; Internal Revenue Service – Criminal Investigation; and United States Postal Inspection Service.  Assistant U.S. Attorneys in the Eastern District of Texas and Attorneys with the National Security Division assisted with the prosecution. 

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Earlier today in federal court in Brooklyn, Kristina Puzyreva, 32, of Montreal, pleaded guilty to money laundering conspiracy for her role in a multimillion-dollar scheme to send components used in unmanned aerial vehicles (UAVs) and guided missile systems and other weapons to sanctioned entities in Russia. The components shipped in violation of export control and sanctions laws were later found in Russian weapons platforms and signals intelligence equipment in Ukraine.

“The defendant in this case flouted our sanctions and export control laws by scheming to send sensitive U.S.-sourced missile and other weapons components to Russia that were later found in Russian weapons systems on the battlefield in Ukraine,” said Deputy Attorney General Lisa O. Monaco. “She now faces time in a United States prison for her actions. As we approach the two-year anniversary of Russia’s unlawful invasion of Ukraine, through our Disruptive Technology Strike Force and our Task Force KleptoCapture, the Justice Department will continue using all available legal tools and authorities to hold accountable those who supply the Russian war machine with critical U.S. technology.”

“Ms. Puzyreva admitted to taking part in an elaborate scheme to smuggle millions of dollars’ worth of restricted U.S. components for use in Russian weapons deployed against Ukraine,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “The Justice Department is committed to denying Moscow the resources it needs to prosecute its unjust invasion of Ukraine, and we will hold accountable covert enablers and profiteers who violate U.S. law to further Russian aggression.”

“The defendant was a necessary player in a scheme to evade export controls and sanctions and ship UAV and missile components to Russia that were later found on the battlefield in Ukraine,” stated United States Attorney Peace. “Without the defendant laundering the proceeds of the scheme, the export scheme would not have worked. Today’s plea demonstrates that the Eastern District of New York will not allow criminals to endanger national security by supplying Russia with U.S.-sourced military technology. This Office will faithfully prosecute every member of a conspiracy to the fullest extent of the law.”

“The FBI and our partners will hold accountable those who violate our laws and enable adversarial nations to obtain U.S. technology to be used in foreign weapon systems,” said Deputy Director Paul Abbate. “In this case, the defendant laundered funds in a scheme which allowed Russia to obtain components used in guided missiles and other systems against Ukraine, and she is now facing the consequences of her actions.”

“Following the money is a law enforcement imperative.  This defendant laundered money on behalf of several Brooklyn front companies to ship U.S.-origin electronics to sanctioned entities in Russia,” said Assistant Secretary of Commerce for Export Enforcement Matthew S. Axelrod of the Department of Commerce. “As today’s guilty plea makes clear, we are unyielding in our efforts to help prevent American electronics from being used in Russian missiles and drones that kill innocent civilians in Ukraine.”

As alleged in the indictment and other court filings, the defendant laundered money as part of a sophisticated export control and sanctions evasion scheme involving SH Brothers Inc. (SH Brothers) and SN Electronics, Inc. (SN Electronics), two companies registered in Brooklyn, New York. Using the SH Brothers and SN Electronics corporate entities, the defendant and her co-conspirators unlawfully sourced, purchased and shipped millions of dollars in dual-use electronics from U.S. manufacturers to end users, including sanctioned entities, in Russia. The electronic components and integrated circuits shipped were later found in seized Russian weapons platforms and signals intelligence equipment in Ukraine, including in UAVs and guided missiles. During the period charged in the indictment, SH Brothers made hundreds of shipments valued at over $7 million to Russia.

Puzyreva and her husband, co-defendant Nikolay Goltsev, traveled on multiple occasions from Canada to meet with their co-defendant Salimdzhon Nasriddinov in Brooklyn. During such trips, Puzyreva utilized numerous bank accounts to make financial transactions in furtherance of the scheme. For example, Puzyreva is the signatory on two New York accounts, including one that lists Nasriddinov’s home address in Brooklyn (also the registered address of SH Brothers) as the address of record. Records for these accounts reflect large, structured cash deposits in Brooklyn and Manhattan that correspond with trips that Puzyreva and Goltsev made to New York. These deposits were then transferred to accounts held and used by Puzyreva and Goltsev in Canada.

The scheme involved millions of dollars in transactions and was lucrative for the defendants. For example, in a text message exchange on or about Jan. 13, 2023, Goltsev complained to Puzyreva that a co-conspirator “asked me to make 80 accounts . . . I am making accounts for 3 mln [i.e., million]. Fingers hurting already from the laptop.” Puzyreva responded, “Lot of money?  We will get rich.” Later, on or about Jan. 20, 2023, Goltsev messaged Puzyreva, “Dasha (a co-conspirator) paid. 700k.”  Notably, financial records revealed wire transfers totaling approximately $700,000 into an SH Brothers account in or around January 2023 from a Hong Kong-based entity as part of an order for a sanctioned Russian entity.

The government seized $20,000 in cash from the New York hotel room in which the defendant was arrested. In total, the government has seized approximately $1.68 million dollars in connection with this export scheme.

When sentenced, Puzyreva faces a maximum penalty of up to 20 years in prison. A U.S. district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Assistant U.S. Attorneys Artie McConnell and Ellen H. Sise for the Eastern District of New York and Trial Attorney Christopher M. Cook of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case, with assistance from Litigation Analysts Mary Clare McMahon and Joseph Levin. Assistant U.S. Attorney Laura Mantell of the Eastern District of New York’s Asset Recovery Section is handling forfeiture matters.

The FBI, Department of Commerce’s Office of Export Enforcement’s New York Field Office, and Department of Homeland Security Homeland Security Investigations are investigating the case.

Today’s actions were coordinated through the Justice and Commerce Departments’ Disruptive Technology Strike Force and the Justice Department’s Task Force KleptoCapture. The Disruptive Technology Strike Force is an interagency law enforcement strike force co-led by the Departments of Justice and Commerce designed to target illicit actors, protect supply chains, and prevent critical technology from being acquired by authoritarian regimes and hostile nation states. Task Force KleptoCapture is an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export restrictions and economic countermeasures that the United States has imposed, along with its allies and partners, in response to Russia’s unprovoked military invasion of Ukraine.